Abstract

With distributed teams becoming increasingly common in organizations, improving their performance is a critical challenge for both practitioners and researchers. This research examines how group members' perception of subgroup formation affects team performance in fully distributed teams. The authors propose that individual members' perception about the presence of subgroups within the team has a negative effect on team performance, which manifests itself through decreases in a team's transactive memory system (TMS). Using data from 154 members of 41 fully distributed teams (where no group members were colocated), the authors found that members' perceptions of the existence of subgroups impair the team's TMS and its overall performance. They found these effects to be statistically significant. In addition, decreases in a group's TMS partially mediate the effect of perceived subgroup formation on team performance. The authors discuss the implications of their findings for managerial action, as well as for researchers, and they propose directions for future research.

Despite the proliferation of distributed teams in organizations, studies show that it is inherently challenging to achieve team effectiveness in distributed environments, due to temporal, geographic, and cultural differences (Espinosa, Slaughter, Kraut, & Herbsleb, 2007; Kotlarsky & Oshri, 2005; Mukherjee, Lahiri, Mukherjee, & Billing, 2012; Sarker, Ahuja, Sarker, & Kirkeby, 2011). Respondents to the “Trends in Global Virtual Teams” survey report that compared to face-to-face teams, it is more challenging to make decisions (55 percent), manage conflict (54 percent), or express opinions (53 percent) in distributed teams (RW CultureWizard, 2014). Since information technology alone is not sufficient to bridge these reported challenges in distributed teams (Duranti & de Almeida, 2012; Kotlarsky & Oshri, 2005; Oshri et al., 2008), there are calls for research on the social aspects of these teams to improve their effectiveness (Kotlarsky, van Fenema, & Willcocks, 2008; Orlikowski, 2002).

To date, existing studies have focused mainly on positive social aspects of virtual teams, such as trust, social ties, rapport, communication patterns, and formal and informal communication, which improve virtual team outcomes (Glückler & Schrott, 2007; Jarvenpaa & Leidner, 1999; Kiesler & Cummings, 2002; Kraut & Streeter, 1995; Lowry, Zhang, Zhou, & Fu, 2010; Storck & Hill, 2000). Fewer studies, however, have examined the social factors that negatively affect team performance in virtual environments, which limits our ability to reduce and mitigate their impacts on team performance. To complement our understanding of the positive social factors that are essential to the success of distributed teams, we focus on negative social aspects of virtual teams. Specifically, we examine the effect of perceived subgroup formation, a factor that has been found to negatively affect team effectiveness in traditional face-to-face team settings (Carton & Cummings, 2012; Cronin, Bezrukova, Weingart, & Tinsley, 2011), but has received limited attention in distributed teams.